SZC [MARKET PERFORM +5.2%] - Substantial land bank underpins medium-term outlook

- We increase our target price for SZC by 17% to VND39,500/share but downgrade our rating to MARKET PERFORM from BUY as the share price has increased by 39% over the last four months. Our higher target price is mainly due to lowering our valuation discount to 10% from 20% and reducing our WACC assumption by 0.7 ppts to 13.0%.

- We forecast the increasing revenue from the Huu Phuoc UA and continuing handovers at the Chau Duc IP in H2 2023 to drive 2023F NPAT-MI growth of 15% YoY to VND227bn (USD10mn; -1% vs our prior forecast).

- We raise our 2024F and 2025F NPAT-MI forecasts by 13% and 15% to VND327bn (USD14mn; +44% YoY) and VND413bn (USD17mn; +26% YoY), respectively, because of our higher GPM assumption following higher-than-expected GPM in H1 2023.